Houston has taken a major step toward the largest Wi-Fi network in North America. On April 11, Houston city council unanimously approved EarthLink, Inc.’s, construction of a city-wide Wi-Fi Network across Houston’s 640 square miles. The deal could span twenty years. The agreement emerged from extensive market competition and careful negotiations resulting in strong commercial terms for both parties. The city anticipates significant benefits for residential broadband users, the business community, low-income users, and city government users. While Wi-Fi is not a cure-all, it can address important broadband issues that should be on every city’s agenda.

Houston’s needs and interests in better, more extensive wireless broadband service are many. The Houston Wi-Fi Network will provide an important communication infrastructure for the fastest growing city in the US. Houston’s population density should increase dramatically over the next twenty years.

This network promises to reduce government costs significantly and improve our municipal services to citizens. The agreement requires EarthLink to provide broadband internet access to the city at no more than $10.00 per month per worker. We should see immediate savings as the city will no longer spend $45.00 per month for each wireless card issued by building safety and restaurant inspectors. The Network will provide important public safety applications. Houston police officers and firefighters currently lack Internet access in their vehicles because it’s too costly, too slow and too intermittent in geographical coverage. The EarthLink network promises the city the ability to receive on-scene photos, building plans, security surveillance, police reports and possibly video in the future. EarthLink promises the system will transmit this data to and from vehicles in motion. The network will provide connectivity for traffic motion and flow analyses, as more and more City vehicles are given Wi-Fi capability. We hope to be able to control the city’s 2,300 traffic lights without needing communication wires to every traffic light location. The city already connects hundreds of parking meters on a smaller Wi-Fi network that will migrate to the Wi-Fi network when it is built out.

In addition, the network will help to address the city’s digital divide. EarthLink will provide up to 40,000 accounts for low-income households at a modest monthly fee. EarthLink will also contribute $1 million in the first two years and three percent of subscriber revenues beginning thereafter for outreach, training, and equipment to make Internet access available for these households.

The network will increase consumer choice by making broadband more affordable. The Network will operate on an “open access” basis, with EarthLink wholesaling network capacity to other broadband service providers. While current broadband service rates in Houston range generally from $30.00 to $50.00 per month, EarthLink has pledged to provide broadband internet access at a wholesale rate of $12.00 per month. The company has estimated that its rates will initially be set at about $22.00 per month for residential users, while other Internet Service Providers that purchase wholesale network access will establish retail prices based on market considerations.

Finally, the Network will promote economic development in the city. The Network will be universally available across the city to supplement business, conventions, tourism and residential offerings. In addition, EarthLink will provide free service to libraries, parks, and other public spaces designated by the city.

Houston faced many challenges in crafting its agreement with EarthLink, including some that were unique. First, the city’s sheer size – the agreement ultimately requires 95 percent outdoor coverage of nearly 640 square miles, the network will be built within 24 months, and that it will perform as promised. We demanded adequate field testing standards to ensure a fully functional network. The city has been the catalyst between EarthLink and CenterPoint to reach a commercially reasonable solution for pole use of street light as the primary mounting platform. The city also learned important lessons from other municipal Wi-Fi projects. From the beginning, I did not want to finance the network with taxpayer dollars, nor did we want to construct, design, and manage the network. Finally, we hoped to avoid the extensive delays that have plagued some communities’ Wi-Fi planning and deployments, and thus, we insisted on prompt negotiations, and tight timelines for network construction.

The final agreement should serve Houstonians well. EarthLink will provide “an evolving wireless broadband network,” not limited to Wi-Fi, and the company is required to update its technology throughout the term of the agreement. The city stays out of the wireless network business itself. EarthLink will finance the $40-$50 million network and the company will design and manage the Network. The city insisted on a rapid, two-year build-out of the entire Network, backed by a $5 million letter of credit, which the city may draw upon if EarthLink fails to achieve this goal. And the contract requires thorough “acceptance testing” by the city before and after the Network’s six zones are activated.

The city will serve as an anchor tenant on the Network, purchasing services for governmental uses at fixed prices for the first five years of the term. The city also insisted on strict termination provisions in the event that EarthLink fails to satisfy the terms of the agreement.

I can summarize our experience in one sentence. Houston first analyzed the economic feasibility of the project against our community’s needs and then we were fair yet insistent during negotiations.

The city council approved the agreement with EarthLink on April 11, and EarthLink and CenterPoint are currently working to finalize the terms of the pole attachment agreement. We expect EarthLink to begin deployment within 30 days of reaching final agreement with CenterPoint, and anticipate that the Network will be completed by the middle of 2009. While Wi-Fi is not a “one size fits all” technology that can solve every governmental, business, or residential communication needs in the city, I am confident that the Wi-Fi Network will serve Houstonians well for years to come.